Global smartphone rebound, EV success fuel Xiaomi resurgence

Bloomberg and staff reporter

Xiaomi (1810) saw its first-half net profit rise 17.9 percent to 9.28 billion yuan (HK$10.13 billion) from a year ago, buoyed by the initial success of its first electric vehicles and a global smartphone market bounceback.

For the second quarter, the tech giant's sales rose a better-than-projected 32 percent to 88.9 billion yuan, its fastest pace of revenue growth since 2021. That compared with an average analyst estimate of 86.9 billion yuan.

Adjusted net income in the second quarter grew 20 percent to 6.18 billion yuan from the previous year, above the 4.8 billion yuan estimated by analysts.

Xiaomi launched its first EV model in March after founder Lei Jun in 2021 said the company would invest US$10 billion (HK$78 billion) in the coming decade in carmaking, a space that's already crowded with major players from Tesla to BYD (1211). The billionaire has said the firm aims to become one of the top five carmakers in 15 to 20 years.

The Beijing-based company raised delivery targets for its SU7 model soon after the vehicle's debut. In May, executives said the company would boost deliveries of 120,000 vehicles this year, versus a previously announced target of about 100,000.

While Xiaomi is only selling the SU7 in China, it showcased the sedan during the Olympic Games in Paris and set up a pit garage at Germany's famed Nurburgring race track.

Lei said in Paris the company will make the vehicle available globally, without providing a time frame. That fueled speculation that Xiaomi is keen to enter the European market despite the European Union's move to slap tariffs on imports of made-in-China EVs.

The company is now developing more models in its EV lineup to better compete with industry leaders, with plans to sell a sport utility vehicle similar to Tesla's Model Y as early as 2025, Bloomberg News has reported. It's also expanding its capacity, purchasing a site in Beijing recently.

Over the past quarter, Xiaomi saw some recovery in its core smartphone business. The world's third largest smartphone supplier shipped 28 percent more handsets compared to the year-ago period as the overall market grew 6.5 percent, according to data from research firm IDC.